Deliveroo’s share price continues to drop at an aggressive rate. This is despite the recent announcement of backing from SoftBank during their capital raising round. The recent drop is also poised to continue based on technical analysis.
Why Deliveroo share price is dropping
Deliveroo was among the top-performing companies during the pandemic. This is because, as the covid-19 spread, people started ordering food frequently. Deliveroo, being a food delivery company, was tailored to benefit from such a market. Unfortunately, even as food delivery services and requests continue to soar, Deliveroo has not been able to keep up with the competition.
Companies such as Uber Eats and Just Eat have posed a significant challenge to deliveroo. This has partly contributed to the company’s share coming under pressure. As the pandemic restrictions were eased, and the rising cost of living, the bottom line of the company was also impacted.
Dileveroo Share Price Prediction
Since August 19, 2021, Deliveroo’s share price has dropped by more than 68 percent. This has also seen the price drop from 396 GBx to the current price of 119 GBx. Using the Bollinger Band indicator on the Deliveroo daily chart, as shown below, the prices have traded below the middle line since December 1, 2021. This is an indication that the share prices have been aggressively bearish.
The RSI indicator also shows that the prices have remained in the oversold region since December 1, 2021. Combining Bollinger Bands and RSI indicators for my analysis, I expect the prices of Deliveroo share to continue with the downward move. I also expect the bearish move to be long-term and likely to last for weeks.
However, if the prices move above the middle line of the Bollinger Band, my trade will be invalidated. It will also mean that Deliveroo shares are set for a trend reversal. If that happens, it is highly likely that a new bullish trend will start.
Deliveroo daily chart
